HP Follows IBM, Ditches Mobile and Soon, its Legacy

The buzz surrounding Silicon Valley titan Hewlett Packard’s decision to sell off its mobile and tablet computer product lines, and perhaps its personal computer business, is a sign that the US economy is moving even further away from an economy that makes things to one of “services.”

Of course, computers and mobile devices have long been made overseas. And HP just could not find success in a market that Apple and Google dominate. PCs have long been a commoditized product; even though PCs are HP’s largest revenue generator, that division is the company’s least profitable. Reviews of the Palo Alto firm’s phones and tablets were pallid at best.

So watch for HP to follow IBM’s lead. Big Blue led the PC market back in the 1980s, but the company now is recognizable from even a decade ago, and its reinvention has become highly successful. As the Wall Street Journal’s Shara Tibken notes:

IBM decided to get out of the PC market because the company viewed it as a commoditized industry where companies can only compete on price. Chief Executive Sam Palmisano said last year during an interview with The Wall Street Journal that he wouldn't be able to give away IBM's PC business today.

Meanwhile HP is close to acquiring Autonomy Corp., a United Kingdom business analytics company, for close to US$10 billion. I predict that with tablets catching on and perhaps even replacing laptops as the technology of choice, HP probably has no choice.

Look for IBM to dominate the technology consulting space, however. As they say, first mover advantage is hard to overcome, so HP will have to make some amazing strategic moves and acquisitions to catch up with IBM.

One movement could benefit, however; HP is sparking good work with its social innovation programs. With hardware fading into the past, HP’s legacy in the 21st century could be using technology as a force for economic progress.